In several aspects termites are a fascinating group of insects having attracted the interest of many researchers. They exhibit a complex social behavior and caste differentiation occurring elsewhere only among the hymenoptera. In an enlarged part of the hindgut, the paunch, termites have established a unique symbiotic association with prokaryotic and eukaryotic microorganisms. A similar flora is also found in wood-eating roaches of the genus Cryptocercus. The study of symbiosis between termites and their intestinal microbes is of general interest, because due to this symbiotic interaction termites can feed on complex biopolymers such as wood. Flagellates and bacteria occur in the gut of lower termites, while higher termites possess only bacteria. In particular spirochetes are abundant in the termite gut. Apart from spirochetes and other more common bacteria, actinomycetes, yeasts and fungi have also been isolated from different species of termites. This review summarizes the distinct role of the intestinal flora in degradation of wood components such as cellulose, hemicellulose and lignin.